Reagan's radical brand of federalism

By
Richard L. Strout /
June 19, 1981

Ronald Reagan said it in his inaugural address, that cold Jan. 20, when he stood before the west front of the Capitol building and looked out over the crowd. He said he was going to "check and reverse the growth of government." What did that mean? It was not the kind of stuff to put into headlines. Government was too big, he thought: "It shows signs of having grown beyond the consent of the governed." Yes, he said (repeating it a couple of times), "the federal government did not create the states: the states created the federal government" and, again, he would act to prevent "the intervention and intrustion in our lives that have resulted from unnecessary and excessive growth of government."

Reporters drummed on their pine plank tables. They had heard this before.

But recently the Senate passed, 65-24, a bill carrying among other things $17 .8 billion budget authority for fiscal year 1982 -- the omnibus multiyear housing and community development bill. It embraced certain federal subsidies Washington pays to cities. It was the first test in Congress of what the President calls the new federalism and it was a big victory. (I suspect and the Democratic House may modify the result).

And what does it mean if enacted? It greatly limits the amounts to be paid. It turns a great deal of spending authority over to the states. It bypasses the cities (or at least that's what some urban critics argue). Several programs are switched from "categorical" grants (in which the money goes for specific purposes) into "block" grants (in which) states and cities have more discretion). It also takes a conservative crack at certain policies now in effect (which the Democratic House may reject). Example: If cities have put in rent control in the hope of protecting low-income tenants they are automatically barred from federal housing subsidies.

Put in brief, 210,000 families got federal rent subsidies last year; President Carter proposed 260,000 for this year; the Reagan program reduces it to something under 175,000 for 1982. The bill cuts proposed federal expenditures and the budget, and simultaneously transfers significant power from Washington to the 50 states. So that's what Mr. Reagan had in mind, Jan. 20.

So much of this is going on now in Washington that it amounts, if successful, to one of the most serious revisions of federalism in this century. The relationship of national, state, and local government has been debated since George Washington called out the state militia in 1794 to see that the coonskin-cap mountaineers of western Pennsylvania paid their excise taxes. What a ruckus that caused; it was humorously called the Whiskey Rebellion. Did he have power? He took power. (Most rebels fled and a couple who weren't sufficiently nimble got presidential pardons.) The precedent stuck.

* Today in Washington Vice-President Bush leads a task force that is identifying and hacking away at federal regulations.

* Another task force is trying to cut down on federal buildings and area holdings outside Washington.

* Mr. Reagan wants some 500 federal programs that aid and service states and localities examined; he proposes a 25 percent cut in financing 85 of the programs and subsequent consolidation of the latter into six broad block grants, to be handled by the states. Cities scream at this. They charge the states will grab money presently allocated, say, to city remedial reading classes, and will use it to help pay highway deficits.

There big fights ahead in this radical program. Does the public really resent what Mr. Reagan calls Washington's "intrusion in our lives" or, at any rate, would it prefer state intrusion? A lot of the programs will require local bookkeeping; can localities do it? Will the poor suffer? These are some of the questions.

One thing seems fairly certain. The interest groups and the people who will feel the cuts have hardly been roused yet; many don't understand it. It will be one of the most interestin g continuing stories in Washington.